Its everything to do with excessive equity dilution(through stock options) by Larry Ellison and his inner circle.
Also,the fact that they pay No Dividends to speak of,is another reason not to own the stock for the long-term.
can this change in the future?Can they start paying better quality and more substantial dividends??Its possible but highly unlikely given Larry Ellison's behavior so far.
In fact,a lot of Oracle customers are getting very,very upset with Oracle over its pricing startegies[Too prohibitively expensive];is this indicative of a change in the Oracle Tide?? I am not sure but sure will be fun to watch.
I have always looked on Larry Ellison as an extremely smart and savvy founder CEO;who has his personal wealth tied up in Oracle.[Yes its true he gets all those stock options issued every year which contributes to tremendous equity dilution and heartburn for longterm retail investors];but bottom line is he ain't going anywhere for the longest amount of time.
So when he talks,we listen.
And what he had to say here,resonated very strongly with me-
I think we're able to grow through acquisitions when they're attractively priced and they make sense and they are by and large not attractively priced now and don't make sense, so we're not doing them. If these assets are wildly overpriced, we can't make a good business case for buying them. Instead, we can focus our energies on organic growth, which means increasing the size of our sales force, introducing additional appliances and [putting in] additional engineered systems
I strongly and wholeheartedly agree with everything he has to say here.Today there are more and more signs that this is a major market top.So Larry is right to stay away(and protect his personal wealth as well too);till he finds more resonable valuations in the market place.
After all,somebody's gotta have the cash to go and participate in the America's Cup right???
Any company, which is purchasing others in large quantities goes out of business when they pause. Large quantity of cash reserve is actually artificial in most cases. That is probably why their stock is not high or is off interests to investors. A year where they do not purchase anything is the year where investors will see true income. In most situation like this one a years of no-acquisitions brings a company down.
@t.alex - Oracle has many competitors, but it depends on the business and application, since Oracle is involved in many business activities (databases, servers, appliances, software applications, etc.).But from an overall competitive landscape, I would say that the top three competitors are: IBM, Microsoft and SAP.
I guess it's all relative when it comes to stock price. I don't think there are any real 'steals' nowadays when it comes to tech stock picks. I have alot of friends that jumped on the tech bandwagon after the economic downturn banking on the fact that the tide would turn and make some nice returns. Most have been surprised to find that if any dividends were earned, they were significantly less than projected. So Oracle is in that bubble as well. In time, once the investor/consumer fears and paranoia subsude more and become more bullish, you will see Oracle ticker going up again.
Oracles stock price hasn't gone up for many years. Although the company is doing well and has alot of cash, it really means nothing for shareholder to own the stock. I would think twice when it comes to investing in the high tech stock such as oracle
I agree with Larry Ellison view that assets are wildely overpriced. We have seen how some of the recent IPO's listed at very high premium and how everyone is concerned about another tech bubble. I am sure these prices will correct once investment dries up.
I think I would agree with Oracle's opinion here that technological companies are somewhat overvalued. Given Oracle's experience in acquisitions and their considerable success, the opinion becomes more credible. However, it would be interesting to know what measures and principles they use to determine the right value of a company. I think that information can be very useful in evaluating other companies as well.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.